The Tale of Two Peripheries in a Divided Europe

Abstract

This article addresses one of the major fault lines that emerged with the controversial crisis management practices in a divided Europe. Much attention has been paid to divergences between the Eurozone core (Germany and other surplus countries) and the crisis-ridden southern periphery of the monetary union. The crisis and its aftershocks that hit Central Eastern European countries in 2009 had also been addressed extensively. Less attention had, however, been paid to the different characteristics of the ‘two peripheries’ of Europe, the one in the South and the other in the East. This article focuses on the differences in their economic structure and most importantly the different role these peripheries play in the division of labour within the European economy. The conclusions we can draw are not only important for the understanding of the challenges these peripheries are facing, but they also deliver lessons to the whole process of European crisis management practices.

Key words:

• Central East Europe
• southern European crisis states
• Eurozone crisis
• growth and employment
• convergence
• wages